Inspection report and Transfer Disclosure Statement

In reviewing the State of California Department of Real Estate policy on Disclosures in Real Property Transactions, I have some questions. There seems to be some confusions on some of the boards out there as to whether or not a Home Inspection report becomes part of the transfer disclosure statement and is attached to the property. I’ve been under the impression that if a buyer hires me for a home inspection, then the report is for the buyers eyes only, unless explicit permission is granted by the buyer to share with the seller. There seem to be others who feel that the seller is entitled to the report as it becomes part of the TDS. When reviewing the guidelines in the .pdf linked to above, it states “Delivery to the prospective buyer of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator,contractor, or other expert (dealing with matters within the scope of the professional’s license or expertise) may limit the liability of the seller and the real estate broker(s)/agent(s) when making required disclosures. The overall intention is to provide meaningful disclosures about the condition of the property being sold or transferred.”

This language appears to apply only to inspections performed by those holding a professional license, which there is not licensing requirements for home inspectors in California as of yet.

Further down the form is a section for the Selling Agent’s Inspection Disclosure. This has no language regarding a home inspector and is merely verifying that the selling agent performed a visual inspection, which IS attached to the TDS.

Continuing on the form, there is a disclosure informing buyer’s and seller’s that they may “obtain professional advice and/or inspections of the property and to provide for appropriate provisions in a contract between buyer and seller with respect to any advice/inspections/defects.”

Does this translate to the report becoming part of the TDS?
How do you handle this, do you dole out the report to all parties, or let the buyer decide?

My understanding is the report is for the buyers.

If the buyers ask for repairs or disclose the report to the sellers, then sellers are then obligated to disclose what they know about the house to the next buyer should your client not close on the house.

The report itself doesn’t become part of the disclosers, but the information in the report about the state of the house would be.

Is it within the seller’s right to refuse to look at the report?

Many times, particularly if the house is part of a probate sale, a short sale, or bank owned, the sale is “as is” and the inspection is only for the buyers information.

Which may not be so much a legal right to refuse to look at the report, but in such a case, they are stating they won’t be bothering to look at the report.

I suggest you give Russell Ray a call regarding the Leko decision and all the ramifications. He has always been more than willing to share. This link may also answer some questions.

I know the times I’ve been on the selling side, I never saw the buyers inspection report.

I also have never seen or had the chance to review the buyers report when selling properties, only their request for repairs.